Visa reason code 10.2: what it means and how to respond

What Visa reason code 10.2 means and when it applies

Visa reason code 10.2, “EMV Liability Shift Non-Counterfeit Fraud,” is filed when the cardholder denies authorizing or participating in a card-present transactionA transaction completed with the physical card at the point of sale, including when the card data is keyed into the terminal.. The card was reported lost, stolen, or not received as issued (NRI). It is not a counterfeit card.

For a dispute to qualify as 10.2, all of these requirements must be present. The transaction must qualify for the EMVEMV is the technical standard used by chip cards. The liability shift determines who bears the loss when the required chip-and-PIN protection is not used. liability shift, must have occurred in a card-present environment, and must be denied by the cardholder. The card must also be a PIN-Preferring Chip CardA chip card configured to prefer PIN, the card’s passcode, as the method for verifying the cardholder., and at least one of these three failures must have occurred:

1. The chip was not read. The transaction did not take place at a Chip-Reading DeviceA point-of-sale terminal or other payment device capable of reading the card’s physical chip..
2. The terminal did not provide the required protection. The transaction was chip-initiated, but the device was not EMV PIN-compliantA terminal that processes chip and PIN according to the EMV standard. For this code, it shows that the required protection was available..
3. The complete chip data did not reach Visa. The transaction was chip-initiated without online PIN and was authorized online. The acquirer did not transmit the Full-Chip DataThe complete data set generated by the chip during the transaction. The acquirer sends it to Visa to record the chip processing. in the Authorization RequestThe request the acquirer sends to the card scheme at the time of purchase to obtain approval for the transaction..

Source for the requirements and three failures: Visa Core Rules §11.7.3.1, Table 11-14 (ID# 0030239).

Visa 10.2 applies only where the non-counterfeit EMV liability shift is active. The full shift covers Canada, CEMEA, Europe, and LACLAC stands for Latin America and the Caribbean. Visa applies the full non-counterfeit EMV liability shift in this region.. Qualifying domestic non-counterfeit transactions in Malaysia are also included, except VEPS transactions. Interregional application depends on the participation of the countries involved. US-domestic transactions are outside 10.2 because the US domestic shift covers counterfeit fraud only, which routes to 10.1. A US acquirer may still receive a 10.2 dispute on an interregional transaction from a participating issuer country.

Source for the regional scope: Visa Core Rules §1.10.1.2, Table 1-12 (ID# 0008190), notes 1, 2, and 4.

Who files the dispute and what happens next

The issuer files the 10.2 dispute on the cardholder’s behalf in VROLVisa Resolve Online is Visa’s system where issuers and acquirers file and track disputes.. Before filing, the issuer must report the fraud using one of Visa’s fraud type codes 0, 1, or 2Visa uses these classifications to record that the card was lost, stolen, or not received as issued..

When filing, the issuer must certify both facts: the card was a PIN-Preferring Chip Card and the cardholder denies authorizing or participating in the transaction. If the fraud was originally reported under another code, the issuer must also explain why the classification changed. The issuer may certify on the cardholder’s behalf only when it obtained the information through a secure method. Alternatively, it may attach a signed cardholder letter that identifies the Payment Credential, merchant, and disputed amount.

Source: Visa Core Rules §11.7.1 (ID# 0030223), §11.7.3.2, Table 11-15 (ID# 0030240), and §11.7.3.5, Table 11-18 (ID# 0030243).

After the issuer files the case, Visa initially assigns financial responsibility to the acquirer through the AllocationVisa’s process for assigning financial responsibility before reviewing a defense from the acquirer. flow. The merchant gives the records to the acquirer, which either accepts the dispute or submits a Pre-Arbitration AttemptThe acquirer’s response to a Category 10 dispute. It provides Visa with at least one defense path allowed for the code. in VROL. There is no separate representment step before this response.

The issuer has 120 calendar days from the Transaction Processing Date to file a 10.2 dispute. The acquirer has 30 calendar days from the Dispute Processing Date to submit the Pre-Arbitration Attempt. The issuer then has 30 days to respond, and the acquirer has 10 days to escalate the case to Arbitration. The 120-day issuer limit applies across all countries and regions. Narrower Allocation response windows apply to certain domestic transactions in Nigeria and Tanzania and domestic ATM transactions in Poland.

Source for the process and response deadlines: Visa Core Rules §11.2.2, Table 11-1 (ID# 0030212). Source for the filing deadline: §11.7.3.4, Table 11-17 (ID# 0030242).

How to reduce the risk of a Visa 10.2 dispute

The main preventive measure is to process the card at an EMV PIN-compliant terminal, read the chip, and obtain the PIN when the card requires it. When the transaction was correctly processed at that device, Visa considers a 10.2 dispute invalid.

When a transaction is chip-initiated without online PIN and authorized online, the acquirer must also transmit the Full-Chip Data to Visa in the Authorization Request. Ask the acquirer or processor to confirm this configuration and keep a retrievable record for each transaction that proves the chip read, data transmission, and cardholder verification method.

Do not confuse manual key entry or a direct magnetic-stripe swipe with fallbackFallback occurs when the terminal first tries to read the chip, the read fails, and the transaction is completed using another technology, such as magnetic stripe.. Fallback is an independent condition that invalidates a 10.2 dispute, but the record must prove that the terminal actually attempted the chip read. Swiping the magnetic stripe at a terminal without a chip reader creates one of the failures covered by this code. If no other defense path applies, Visa’s guidance is to accept the dispute.

Source for the prevention measures: Visa Dispute Management Guidelines for Visa Merchants, Condition 10.2, p. 21. Source for the conditions that invalidate the dispute: Visa Core Rules §11.7.3.3, Table 11-16 (ID# 0030241).